Northern Technologies International Corp (NTIC) Reports Fiscal Year 2023 Results
Consolidated net sales increased by 7.7% to a record $79.9 million for the full fiscal year.
Net income attributable to NTIC decreased to $2.9 million, or $0.30 per diluted share.
Joint venture operating income rose by 10.9% to $11.6 million for the fiscal year.
NTIC's balance sheet remains strong with working capital of $22.95 million as of August 31, 2023.
On November 21, 2023, Northern Technologies International Corp (NASDAQ:NTIC) released its 8-K filing, announcing financial results for the fourth quarter and full year fiscal 2023. Despite economic headwinds, NTIC achieved its third consecutive year of record sales, with consolidated net sales reaching $79,903,000, a 7.7% increase over the previous fiscal year.
Financial Highlights
NTIC's ZERUST industrial net sales saw a modest increase of 2.0% to $53,926,000, while ZERUST oil and gas net sales surged by 69.3% to $7,802,000. Natur-Tec product net sales also grew by 8.8% to $18,175,000. However, NTIC China experienced a decline in net sales of 14.5%, totaling $13,469,000.
Joint venture operating income for the year increased by 10.9% to $11,642,000. However, net income attributable to NTIC decreased to $2,912,000, or $0.30 per diluted share, compared to the previous year's $6,325,000, or $0.66 per diluted share. Cash provided by operating activities was notably higher at $5,541,000 for fiscal 2023, compared to $1,146,000 in the last fiscal year.
Balance Sheet and Cash Flow
NTIC's balance sheet as of August 31, 2023, remained robust with working capital of $22,950,000. Cash and cash equivalents stood at $5,406,000, and the company had an outstanding revolving line of credit and term loan balance of $6,357,000. Investments in joint ventures were valued at $23,706,000, with 58.0% of that amount in cash.
Operational and Market Challenges
President and CEO G. Patrick Lynch commented on the fiscal year, noting the company's resilience amid economic challenges in Europe and China, as well as rising interest rates in the U.S. Lynch expressed optimism for the upcoming fiscal year, citing stable demand in the North American Zerust industrial market and potential growth in the ZERUST oil and gas and Natur-Tec businesses.
"Fiscal 2023 marked NTICs third year of consecutive record sales, despite the economic challenges growing in both Europe and China, as well as rising interest rates in the U.S. Our continued sales growth success demonstrates the increasing value we provide our global customers as well as the efficacy of our strategic focus on diversifying our products, end markets and geographies. I am particularly encouraged by the top-line results within the large oil and gas, and compostable plastics markets," said G. Patrick Lynch, President and CEO of NTIC.
Restatement of Historical Financial Results
NTIC also disclosed a restatement of its consolidated financial statements for certain periods of fiscal 2023 to correct the accounting treatment of employee retention credits. This restatement resulted in a decrease to net income attributable to NTIC of $474,000 and $466,000 for the three months ended February 28, 2023, and May 31, 2023, respectively.
Outlook and Forward-Looking Statements
Looking ahead, NTIC plans to invest strategically in its infrastructure throughout fiscal 2024 and navigate challenges in European and Asian markets due to evolving geopolitical conflicts. The company remains confident in its positioning for continued top-line growth and improving bottom-line profitability in fiscal 2024.
For detailed financial tables and further information, readers are encouraged to view the full 8-K filing. NTIC will also host a conference call to review its results and outlook, with a webcast available for interested parties.
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Explore the complete 8-K earnings release (here) from Northern Technologies International Corp for further details.
This article first appeared on GuruFocus.
